LasersHurt:The Homer Tax: I use people dollars to pay bills, put gas in my car, buy food for my family and diapers for the baby.

Where would I go to use Internet monies to do that? I don't think target takes USB drives as payment.

You can use bitcoin in a variety of online stores, like Overstock.com, TigerDirect, or others. More start accepting every day. You can also turn Bitcoin into Amazon Giftcards, or USD, and buy whatever else you want.

Bitcoin is the exception, not the rule. In most of your life you'd use your local fiat currency. But it's growing in acceptance, and provides a novel means of exchange that some people like. The low transaction fees can save many merchants money.

Why would I want to use a different currency at overstock when they take dollars, which I already have and everyone takes online and in real life?

I admittedly know absolutely nothing about this bit coin stuff, but it really really seems like itchy and scratchy money to me.

I have two children under four. I have time for one hobby, and it's home brewing. "Novel currency" feels like an unnecessary hassle when normal money serves my "buying things" needs perfectly.

impaler:Belias: MelGoesOnTour: Belias: Blame the company, not the currency.

MtGox didn't lose the US dollars on their exchange. They lost their bitcoin.

You are incorrect. They also lost funds from their bank account, in a parallel theft. Regardless of amount stolen for each, the net result is that they do not have enough funds left to repay their depositors. Customers will lose BOTH their Bitcoin AND their fiat deposits - USD, Euro, etc.

They were either incredibly (incredibly) incompetent, or they are committing fraud. Neither of these says anything about the Bitcoin protocol.

LesserEvil:ikanreed: LasersHurt: ikanreed: Belias: hardinparamedic: Well, it's also a good thing that I can pretty much count on not getting a call from my bank telling me my USD are now worthless and missing, isn't it?

Yes, just as I can count on my Bitcoins not to spontaneously go missing, because I have not chosen a "Magic, the Gathering" site to store them. But to be sure, lemme check my accounts. It seems the net effect of the MtGox failure on my Bitcoin balance was ... none.

It's clear that MtGox's customers are facing missing value - both in dollars and in Bitcoin. I don't follow the "worthless" part of your statement. By "worthless", do you mean "trading at $650 per Bitcoin?"

Ooh, a true believer, I haven't seen one in the wild for a while. Tell me, if the hard drive that had your .wallet crashed, how much would you have?

So long as he backed it up? Everything he had before.

That would be smart of hypothetical him. Unless the backup was more exposed to theft. Then that'd be bad. The point I'm trying to make is that he's assuming the technical risks for himself, rather than making them vanish. And that is beyond the casual user. And the casual user is the most important user of a currency. They're the ones that provide liquidity.

Again, people who do not understand cryptos seem to think they can speak about it.

Your backups are password protected. You keep them secure, like you might bonds. If you lose a million dollars worth of bonds in a fire, who is going to replace them when you have no proof you owned them in the first place... "hypothetical case" of course.

It's actually pretty easy for casual users. Get Multibit as your wallet client. Make password-protected backups to a USB flash drive and keep in a fire safe. Gee, that wasn't hard at all. Transactions I've done (small time, I have less than $100 in BTC right now) have been quick and simple. I bought some stuff on Bitmit.net, but that's been down for a few months. Ultimately, it was as easy as ...

Debeo Summa Credo:But why does the "productive power and financial potential" of a country give any more value to a fiat currency? If nobody will accept my $20 bill, how do I trade it in for $20 worth of GDP? If i bring it to down to the treasury will Jacob Lew give me some steel and wheat? How much steel and wheat?

Yeah, but the same can be said for gold, silver, shiny beads, giant stone coins, etc. No currency has any value beyond what you can trade it for. That's why I started my petition to back the US dollar with potatoes.

/yes, I know that gold has use in electronics but that is not traditionally what its value is based on. Its value is based on "ooh, shiny!"

hardinparamedic:But, hey. BitCoins are no different than any other Fiat Currency*, right?

*except for the fact that modern currencies are backed by the GNP of a country.

Well in fairness, Citi DID just announce that its Mexican subsidiary Banamerica was just scammed out of $400 million too, and it too is also being investigated for money laundering, so while Bitcoins are stupid for a lot of reasons, Mt Gox looks no more sleazy or amateurish than the big boys

Does it tie things together a bit to mention that the heist may have been perpetrated by a government agency? They could discredit competing currency, steal from people supporting it and use the stolen currency for clandestine operations.

Hell, they could have used the proceeds from the first bitcoin theft to buy zero days exploits to pull this one off. Now they've got a self funding continuous attack with far less hard work and without exposing any security weaknesses a three letter agency already knows about.

Agencies that can create Stuxnet or Uroburos could certainly manage this. Wealthy private organizations like the Fed might see value in it too.

Pumpernickel bread:How the fark do you lose a virtual currency? I don't understand that. I can understand how someone can steal you cash or gold, but this?

They held more virtual currency than the money the currency was worth is how I understand the situation. Suddenly, a lot of that currency "vanished" (read: Ended up in someone else's wallet), and now the bank didn't have funds to pay the virtual currency holders who suddenly wanted to dump their investment and pull their money out in usable national currencies.

Belias:Having never had a virus, trojan, or hacking incident of any kind, I'll gladly be responsible for making sure my phone isn't "hacked". Hint: stay away from installing programs that pop up when you visit porn sites. It's really not that hard.

Nice phone there.

Be a shame if something happened to the person holding it.

/sneaker net is not secure. Physical access methods and social engineering are highly effective zero day exploits.

It's even written into the code and design, but it won't just end in one last fraud like your typical pyramid scheme. Nope, it'll be libertarian wackos who think it solves some [I'd say unspecified, but I can think of quite a few specified yet nonsensical ones] problem in financial markets infinitely preying on each other like in eve.

Belias:Ok, here's another. If I visit a store and pay with my debit card, I must trust the store to safeguard my information. If you shopped at Target late last year, you know that is not always a safe bet. Target stores your card number, your name, your PIN, etc. With this information, nefarious people can access your bank account. The fact that you stand to be reimbursed for that theft is little consolation to people who's mortgage payment bounced due to their accounts being siphoned.

Let's compare that to a Bitcoin payment scenario. I visit a retailer (not Target yet, but a Bitcoin accepting retailer). I make my purchase by snapping a QR code with my phone, tap my password in, and accept the charge. The retailer gets ONLY that payment. They do not get any information that would allow them (or a nefarious hacker) to access any further funds.

Yeah, the fact they don't lose any money is little consolation for the security breach. Now take bitcoin, where if someone hacks your phone they get all your money and you never get it back.

Smackledorfer:The only supported advantage you have mentioned in this entire thread is transaction fees, and that is only an advantage over credit cards.

Ok, here's another. If I visit a store and pay with my debit card, I must trust the store to safeguard my information. If you shopped at Target late last year, you know that is not always a safe bet. Target stores your card number, your name, your PIN, etc. With this information, nefarious people can access your bank account. The fact that you stand to be reimbursed for that theft is little consolation to people who's mortgage payment bounced due to their accounts being siphoned.

Let's compare that to a Bitcoin payment scenario. I visit a retailer (not Target yet, but a Bitcoin accepting retailer). I make my purchase by snapping a QR code with my phone, tap my password in, and accept the charge. The retailer gets ONLY that payment. They do not get any information that would allow them (or a nefarious hacker) to access any further funds.

I have also worked at what is arguably one of the seediest adult bookstores west of the Mississippi, where I was regularly robbed, assaulted, forced to be complicit in methamphetamine dealing, had to clean jizz and AIDS-infected needles and oceans of piss with islands of feces out of the arcade every single night, worked every Christmas and Thanksgiving, received constant perverted phone calls and unwanted advances, got called a f*gott by passing cars every time I swept the parking lot, had to smile and be professional to pedophiles (which kind of fell apart towards the end and led to me finally leaving), had to smile and be professional to the police, and even encountered a human corpse or two.

Smackledorfer:LasersHurt: "Mining" is the "work" that you do, which is searching for cryptographic sequences and verifying network work.

Yes, I love this part too. In order to achieve scarcity and add some semblance of value to Bitcoins, we first have spend real world resources like electricity to create them. I know, resources are spent to create paper currency and mint coins, but unless bitcoins do something significant that the dollar cannot (and I still don't see what that is) then that is a lot of waste for nothing.

That is one of the main complaints - people are searching for a way to make useful work a part of the process. It's starting with things like Folding@Home or BOINC.

ikanreed:Yeah, this is why you get called "true believers". It's because the currency's mechanics can never fail, they can only be failed. It's a bit deluded.

What's deluded there? I pointed out the points of failure that exist. They are known. All things have points of failure.

Bitcoin is a protocol. Actual threats are mitigated through updates over time.

I find it absurdly childish that you can know so little about something, yet decide everyone who disagrees with you needs a snarky title. I've not even said that Bitcoin is this, that, or the other thing - no worship, no superlatives. It is precisely what it is. How that makes me a "true believer" I do not understand.

K3rmy:For those who work in call centers, the other thing to do is pick a stupid word of the day. This would be a word that should have NO BUSINESS being spoken during your call but you have to find a way to do so. Bonus points for creativity. Now the word does not have to be profane or vulgar. Just inappropriate. Like "Watermelon", "Aardvark", "Disco" or "Pantyhose" in a inbound technical support call center.

LasersHurt:ikanreed: LasersHurt: ikanreed: Belias: hardinparamedic: Well, it's also a good thing that I can pretty much count on not getting a call from my bank telling me my USD are now worthless and missing, isn't it?

Yes, just as I can count on my Bitcoins not to spontaneously go missing, because I have not chosen a "Magic, the Gathering" site to store them. But to be sure, lemme check my accounts. It seems the net effect of the MtGox failure on my Bitcoin balance was ... none.

It's clear that MtGox's customers are facing missing value - both in dollars and in Bitcoin. I don't follow the "worthless" part of your statement. By "worthless", do you mean "trading at $650 per Bitcoin?"

Ooh, a true believer, I haven't seen one in the wild for a while. Tell me, if the hard drive that had your .wallet crashed, how much would you have?

So long as he backed it up? Everything he had before.

That would be smart of hypothetical him. Unless the backup was more exposed to theft. Then that'd be bad. The point I'm trying to make is that he's assuming the technical risks for himself, rather than making them vanish. And that is beyond the casual user. And the casual user is the most important user of a currency. They're the ones that provide liquidity.

Which is why more companies are putting stronger systems in place. I prefer to keep mine offline and deal with it myself, but it's absolutely trivial to make a secure backup. You protect the key as well - the chances of "theft" are exceedingly low.

It's not perfect. If that's your takeaway, so be it.

Yeah, this is why you get called "true believers". It's because the currency's mechanics can never fail, they can only be failed. It's a bit deluded.

Bitcoin has been rising steadily, even today, on news that another online wallet was robbed (This time only about $615,000 worth).

The lessons:

* Some people are ignorant as hell and confuse MtGox with Bitcoin.* Some people absolutely hate cryptocurrency without understanding what it is, or why it has value* The money was stolen from MtGox because they did not provide proper security measures.* Exchanges and online wallets are only as secure as the passwords used to secure them AND the security measures used to protect the data. This isn't a failing of Bitcoin, which can (and should) be kept in a personal wallet, rather than trusting an online exchange with it.* Bitcoin isn't just for criminals. Many legitimate vendors accept bitcoin, like TigerDirect. In places like Cyprus and Greece, it is more secure than keeping your money in a bank, where the government regularly dips into people's accounts to line their own pockets.* Bitcoin's value doesn't go up and down in wild swings. It isn't as stable as the US dollar, to be sure... and as difficulty in mining goes up, so will the value. but it's not like it's losing half its value overnight. MtGox's exchange rates were rigged at the end to try and devalue BTC, and it didn't work.

I can always count on a lot of herp-a-derp in these threads from the farkers who seem to really, really hate bitcoin with a passion, though they've had no experience with it, and for no real reason than their own unsubstantiated opinion that BTC is valueless. Clearly they are wrong - people exchange BTC for cash and services all the time now.

As for the criminal element - sure, there's the Silk Road nonsense, but that is only a part of it, and realistically, no more a part of it than what cash is to crime. That is to say... criminals will take advantage of any system they can. Is your money any safer in a debit account that you used to make a charge at Target last Christmas? We've also seen how effective the Silk Road was in not getting caught...

ikanreed:Belias: hardinparamedic: Well, it's also a good thing that I can pretty much count on not getting a call from my bank telling me my USD are now worthless and missing, isn't it?

Yes, just as I can count on my Bitcoins not to spontaneously go missing, because I have not chosen a "Magic, the Gathering" site to store them. But to be sure, lemme check my accounts. It seems the net effect of the MtGox failure on my Bitcoin balance was ... none.

It's clear that MtGox's customers are facing missing value - both in dollars and in Bitcoin. I don't follow the "worthless" part of your statement. By "worthless", do you mean "trading at $650 per Bitcoin?"

Ooh, a true believer, I haven't seen one in the wild for a while. Tell me, if the hard drive that had your .wallet crashed, how much would you have?

hardinparamedic: Well, it's also a good thing that I can pretty much count on not getting a call from my bank telling me my USD are now worthless and missing, isn't it?

Yes, just as I can count on my Bitcoins not to spontaneously go missing, because I have not chosen a "Magic, the Gathering" site to store them. But to be sure, lemme check my accounts. It seems the net effect of the MtGox failure on my Bitcoin balance was ... none.

It's clear that MtGox's customers are facing missing value - both in dollars and in Bitcoin. I don't follow the "worthless" part of your statement. By "worthless", do you mean "trading at $650 per Bitcoin?"

spamalope:Does it tie things together a bit to mention that the heist may have been perpetrated by a government agency? They could discredit competing currency, steal from people supporting it and use the stolen currency for clandestine operations.

Hell, they could have used the proceeds from the first bitcoin theft to buy zero days exploits to pull this one off. Now they've got a self funding continuous attack with far less hard work and without exposing any security weaknesses a three letter agency already knows about.

Agencies that can create Stuxnet or Uroburos could certainly manage this. Wealthy private organizations like the Fed might see value in it too.

The sign of a great con is when the mark is absolutely convinced someone else is at fault.

Chagrin:Virtual currency highly involved with the legal drug trade? What's the lifespan of an employee that screws those people over?

These were my first two thoughts when I heard of the Mt Gox theft:When that news hit the wire, I would SO not want to be the bright young cartel member or mob soldier who convinced my boss to stash the family's profits in Bitcoins because they were so safe an untraceable. and then following on the heels of that, the idea that these people are not noted for their forgiving and generous natures, and that whoever DID make off with those had better be goddamn sure they can trust their laundering/fencing operation

To be blunt there's a lot of good opportunities here for smart people to make some honest money. One of the big problems I always had with MtGox was that it took an old-world view on a very new, very alien technology.

hardinparamedic:Debeo Summa Credo: Not that I buy into or understand bitcoins, but what does it mean to you to have a currency "backed by the GDP of a country"?

Because it's not just a piece of paper backed by a finite resource such as Gold. IANAE, but the production power and financhial potential of a first world country seems a little more safer a bet than a barter commodity who's only value is what the community itsself places on it, and which encourages hoarding due to it's numerical cap.

But yeah. I'm still going to point and laugh.

But why does the "productive power and financial potential" of a country give any more value to a fiat currency? If nobody will accept my $20 bill, how do I trade it in for $20 worth of GDP? If i bring it to down to the treasury will Jacob Lew give me some steel and wheat? How much steel and wheat?

I think we both view bitcoins as a "bigger idiot theory" type alternative currency. The only thing that gives them value is the demand of other idiots for them.

But conceptually, the dollar is not dissimilar. It's just that there are alot more "idiots" out there who use dollars and have been using dollars for a very very long time. Therefore we can be much more confident that there will always be a fellow idiot to which to trade our intrinsically worthless dollars to for tangible goods.

The only thing IMO that gives dollar bills a floor value is that the US government can require tax payments to be made in dollars. So by requiring tax payments in these worthless pieces of paper, the government can actually force people to need them, giving them a non-zero value.

Debeo Summa Credo:Not that I buy into or understand bitcoins, but what does it mean to you to have a currency "backed by the GDP of a country"?

Because it's not just a piece of paper backed by a finite resource such as Gold. IANAE, but the production power and financhial potential of a first world country seems a little more safer a bet than a barter commodity who's only value is what the community itsself places on it, and which encourages hoarding due to it's numerical cap.

rumpelstiltskin:Mocking people who lost their money trading bitcoins sounds like fun. And I could practice my Indian accent. "I am being Rupert from Des Moines. Dez Moyns. How may I be of assist to you today?"